Consolidate Company – A summary of the activity

This activity allows you to consolidate financial information at the group company level. Consolidation is the process of combining the individual financial statements of multiple companies to prepare the consolidated financial statement of the parent company. The selected companies must form a part of the hierarchical structure of the parent company. A consolidated statement shows the financial position of the group company as a single business entity.

The activity allows you to combine the balances available in the finance books of the child company.  The balances will be taken up from the finance book of type “Consolidation” if it is available or from the finance books of type “Main”. Entries are posted in the “Consolidation” finance book of the parent company after the consolidation is completed. The consolidation can be done for a selected financial year or financial period.

Consolidation is done in the base currency of the company. If the company has a parallel base currency, consolidation is done in the parallel base currency of the parent company. You can consolidate a child company using the base currency or the parallel base currency balances provided they are the same as the parent company’s base currency. However, if they are different you can convert the consolidation balances with the help of the exchange rates.

You can consolidate the balances of the child company with the parent company:

•  in the base currency of the child company if the base currency is same as the base currency of the parent company.

• In the parallel base currency of the child company

• if the base currency of the child company is different from the base currency of the parent company and

• if the parallel base currency of the child company is the same as the base currency of the parent company.

•  By converting the balances if the base currency and the parallel base currency of the child company is different from the parent company.

Refer Example for more details.

This activity also allows you to define the exchange rates that can be used for converting the account balances. You can enter an exchange rate for each group or each layout heading to which the account belongs. This activity also provides you the facility to use different exchange rate types for each of the account groups or layout heading. The system retrieves the respective rates based on the account group or layout heading and the user can modify the same.

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